Section 22 | Payment for cancelled shifts etc.

(1)After section 221 of ITEPA 2003 (payments where employee absent because of sickness or disability) insert—

221APayment for cancelled, moved or curtailed shift

(1)This section applies to a payment made to an employee under section 27BP of the Employment Rights Act 1996 (right to payment for a cancelled, moved or curtailed shift) by reason of the employee’s employment.

(2)The payment—

(a)is to be treated as earnings from the employment for the relevant tax year, and

(b)does not constitute earnings from the employment by virtue of any other provision.

(3)For the purposes of this section and the application of Part 2 of this Act (charge to tax) to amounts treated as earnings under this section—

(a)“employee” includes a former employee or individual who was a prospective employee immediately before the shift was cancelled, moved or curtailed, and

(b)employment is to be construed accordingly.

(4)Accordingly, for the purposes of applying this section and Part 2 of this Act (charge to tax) to a payment made to a prospective employee by reason of a prospective employment it does not matter whether the prospective employee ever holds the employment.

(5)Sections 17 and 30 (treatment of earnings for year in which employment not held) do not apply in connection with determining the year for which amounts are to be treated as earnings under this section.

(6)In this section “relevant tax year” means the tax year in which the duties of the shift in respect of which the payment under subsection (1) was made that were not performed would have been performed if the shift had not been cancelled, moved or curtailed.

(2)The amendment made by this section comes into force on the first day on which the duty in section 27BP(1) of the Employment Rights Act 1996 has effect.